"Life Cycle" Hypothesis of Saving: Aggregate ... - Arabictrader.com

Index 387
Coefficients of the aggregate consumption
function, a priori estimates of, 51
Cohen, Rich, 382
Cohort effects, 146, 150, 151
vs. age effect, 162
in wealth, 152
Co-integration, 187
Colombia, income and savings in, 134
Commodity basket, 283, 332–333
Communist regimes, 316n.4
Comoros, income and savings in, 134
Competition with low-wage countries, and
European unemployment, 212
Conditional negative income taxes, 232–233
Conspicuous consumption, 45n.58
Consumables, price level of, 4, 7
Consumer choice, theory of, 4
Consumption
age profile of, 155
and assets, 29–30
in China, 175–176
sources for, 203
definition of, 7
in SHIW, 170–171
and utility function, 8–9
Consumption function, 3, 19
aggregate, 48–52
and downward revaluation of market value of
assets, 76n.32
individual, 10–12
Keynesian, 3, 64–66, 68, 75n.26, 345
and Sterling effect in LCH framework, 120
theory of, 31
Consumption function model (Modigliani and
Brumberg), 4, 47
and aggregate consumption function, 48–51
and a priori estimates of coefficients of
aggregate consumption function, 51–52
and cyclical vs. long-run behavior of
consumption-income ratio, 67–70
and Duesenberry-Modigliani consumption
function, 70
empirical verification and estimation of,
54–63
with addition of variables, 75n.26
bias in estimation of, 54, 60, 61–62, 71–72
high serial correlation of residuals in, 74n.21
and 1900–1928 statistics, 70–71
implications of and empirical evidence on,
10–33
and Klein’s analysis, 33–36
and measurement of expected income, 52–54
and saving, 91
and saving-income ratio, 67
and standard Keynesian consumption
functions, 64–66, 68
theoretical foundations of, 4–10
Consumption-income relationship (ratio)
cross-section, 12–13, 17–24, 40n.23
cyclical vs. long-run behavior of, 67–70
expected income in, 58
and income over short interval, 26–27
in Lifetime Cycle Hypothesis, 179
in nonstationary household, 15–16, 18
residual error in and savings-income
relationship, 72
in stationary household, 13–15, 20, 38–39n.23
Corporate finance, Modigliani-Miller theorem
on, 373–374
Costa Rica, income and savings in, 134
Cost of capital
investment and output dependent on, 349–350
in Modigliani interview, 373
Cost-of-living adjustment, uniform (Italy), 383
Côte d’lvoire, income and savings in, 134
Counter-cyclical measure, debt as, 100–102
Credit
in Modigliani interview, 369–370
and underdeveloped regions, 227–228
and unemployed, 233
Cross-section consumption-income relation,
12–13, 17–24, 40n.23
Cross-section data, 3
Cross-section savings-income relation, and
marginal propensity to save, 32–33
Crowding out, xi, 222, 356, 376. See also
Capital formation reduction
Cultural values, and economic organization,
308
Culture, and saving ratios, 200
Currency speculation, 277
Current Account Budget, 222
Cyclically balanced budget, 102
Cyprus, income and savings in, 134
Deadweight debt or deficit, 84, 103n.5
Deceased effect, 164, 166–167, 168
Deficit (debt) financing. See also National debt,
burden of
investments and current accounts treated
identically in, 221
in Keynesian analysis of unemployment, 356
and Life Cycle model, 120
and Ricardian equivalence, 376–377
vs. tax financing, 89–90, 102, 104n.27
for impact vs. total effects, 90–94, 96
and war financing, 99
in U.S., 324–325
under Reagan, 322, 376
Demand, aggregate. See Aggregate demand
Demand management policy
errors in, 214–215
and inflation, 209
for unemployment, 209, 213, 214